When Hiring Stars Hurts Performance
If your talent acquisition team is hiring star talent, then there is a reasonable chance it’s inadvertently hurting your organization. That’s a bit of a kick in the teeth for HR since typically we thought that hiring top talent was always the right thing to do.
This finding comes from an article by Matteo Prato and Fabrizio Ferraro called Starstruck: How Hiring High-Status Employees Affects Incumbents’ Performance (Organization Science, 2018). When you think about it, the finding makes a kind of intuitive sense: when you hire a high-status employee, it may disrupt the team dynamics and lead to lower performance in other workers.
In essence, you have two competing forces. On the one hand, if the high-status newcomer really is a high performer then that increases performance; on the other hand, if they disrupt the team then that decreases performance.
Prato and Ferraro point out that, very often, high status isn’t closely correlated to high performance. Someone may have a great resume and a good reputation but not actually be a top performer. In these cases, the negative effects of bringing in this high-status person may outweigh the positive ones.
What you can do to mitigate the harmful effects
The first lesson of this research is that you while you should bring in high-performers you will want to avoid having them labelled as “stars”. If that is unavoidable then you may not want to hire them at all.
A broader lesson, one Jeff Pfeffer made in the article, Fighting the War for Talent is Hazardous to Your Organization's Health (Organizational Behavior, 2001) is that aiming to have the best talent should not be the central goal of your talent management strategy. It’s much more effective to work on systems that get the best out of talent, rather than simply trying to have as many stars as possible.
What is the role of the talent acquisition function?
Chances are that the heads of your business units are not reading the latest academic literature on hiring. They tell talent acquisition to hire a star, maybe even give them some names to go after. Is it talent acquisition’s job to tell the business leader that their approach to talent management may backfire? I think the answer is “yes”, the talent acquisition function should not be playing “fetch the talent” for leaders, it should be bringing professional expertise to the process and pushing back when leaders ask for the wrong things. We should spend more time thinking about how hiring can bring in characteristics that will bolster a team. In other words, the team is the unit of analysis, not the individual in a job. We only do that in a rudimentary way now, there is an opportunity to do it with much more precision.
HR is rarely straightforward. Even something like hiring a top performer may backfire. One of the roles of HR is to help leaders understand this sort of complexity. People want to have simple stories and it’s our job to convince them that the simple story won’t get them what they want. That’s a hard job to do.